In this edition of our “Ask the Experts” series, we attempt to pinpoint the source of our personal finance behavior with experts in the fields of business, sociology, political science, and economics.
It’s an interesting question: Are our spending habits learned, and if so, from where? I mean, do we get them from our parents? Could the example set by other authority figures, such as government officials, influence our actions? Or, perhaps spending habits are as personal and unique as finger prints.
Not only might those questions pique your intellectual curiosity, but their answers also carry great importance in the current economic climate.
As consumers, we continue to rack up credit card debt in record numbers, as if the housing bubble party continues to rage on. We’re also still trying to sort out the countless underwater mortgages leftover from the Great Recession, and many folks believe that our more than $1 trillion in outstanding student loan debt puts us on track for another economic crisis down the road.
Then there’s the government. In between dodging crises borne from cliffs and ceilings, the country’s political leadership is managing to ensure that prodigious debts will be a thing of the future by padding budget deficits by the trillion. You can’t ignore the effect of pop culture either, as celebrities seem to prize mammoth houses, fancy cars, “Black Cards,” and walk-in closets bigger than many New York City apartments.
So, who’s to blame? Well, let’s see what the following experts have to say:
There’s obviously a lot to digest here, but let’s see if we can whittle down all the experts’ great insights into a few concise takeaways.
- Any number of things could influence your spending habits, from the way your parents manage money and your mood to the economic climate and your affinity for pop culture.
- People don’t tend to emulate government spending habits, but government policy can impact the way in which consumers approach their finances.
- It’s important to take stock of your personal spending “triggers” so you’re cognizant of when you might be entering dangerous territory or adopting bad habits.
- As always, keeping a budget is extremely important. Adopting the Island Approach and designating one card for everyday spending and another for paying off debt will help in this regard, making it possible to garner the best collection of terms and providing a built-in overspending alert system (finance charges on your everyday spending card will signal the need to cut back).
- While it would be easy to use the various factors that influence our spending habits as excuses for living beyond our means, we all have to come to grips with the fact that doing so is not only costly, but that it also puts the economic fate of our country at risk.